BILL NUMBER: AB 996	CHAPTERED  09/30/00

	CHAPTER   1013
	FILED WITH SECRETARY OF STATE   SEPTEMBER 30, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 29, 2000
	PASSED THE ASSEMBLY   AUGUST 30, 2000
	PASSED THE SENATE   AUGUST 29, 2000
	AMENDED IN SENATE   AUGUST 25, 2000
	AMENDED IN SENATE   AUGUST 18, 2000
	AMENDED IN SENATE   JUNE 20, 2000
	AMENDED IN SENATE   JUNE 7, 2000
	AMENDED IN ASSEMBLY   APRIL 21, 1999
	AMENDED IN ASSEMBLY   APRIL 12, 1999

INTRODUCED BY   Assembly Member Papan
   (Principal coauthor:  Senator Leslie)
   (Coauthors:  Assembly Members Alquist, Cox, and Dutra)
   (Coauthors:  Senators Costa, Johannessen, Johnson, Karnette, and
Polanco)

                        FEBRUARY 25, 1999

   An act to amend Section 2941 of the Civil Code, relating to
mortgages.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 996, Papan.   Mortgages and deeds of trust.
   Existing law provides that when any mortgage has been satisfied,
the mortgagee, or its assignee, shall execute and record, or cause to
be recorded, a certificate of discharge, except as specified.
Existing law also provides that when an obligation secured by a deed
of trust has been satisfied, the beneficiary, or its assignee, shall
execute a full reconveyance and record or cause it to be recorded,
except as specified.
   This bill would define the phrases "cause to be recorded" and
"cause it to be recorded" for the purposes described above to
include, but not be limited to, sending by certified mail with the
United States Postal Service or by a courier service, as specified,
the full reconveyance or certificate of discharge in a recordable
form, together with payment for all required fees, in an envelope
addressed to the county recorder's office in which the deed of trust
or mortgage is recorded.  The bill would require the county recorder
to stamp and record the full reconveyance or certificate of discharge
within 2 business days from the day of receipt, if received in
recordable form with all required fees.  This bill would further
provide that fulfilling these provisions would entitle the trustee to
the benefit of a specified evidentiary presumption.  The bill would
further provide that these provisions only apply to a mortgage or an
obligation secured by a deed of trust satisfied on or after January
2, 2001.
   Because this bill would increase the duties of local officials, it
would create a state-mandated local program.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement, including the creation of a State Mandates Claims Fund
to pay the costs of mandates that do not exceed $1,000,000 statewide
and other procedures for claims whose statewide costs exceed
$1,000,000.
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 2941 of the Civil Code is amended to read:
   2941.  (a) Within 30 days after any mortgage has been satisfied,
the mortgagee or the assignee of the mortgagee shall execute a
certificate of the discharge thereof, as provided in Section 2939,
and shall record or cause to be recorded, except as provided in
subdivision (c), in the office of the county recorder in which the
mortgage is recorded.  The mortgagee shall then deliver, upon the
written request of the mortgagor or the mortgagor's heirs,
successors, or assignees, as the case may be, the original note and
mortgage to the person making the request.
   (b) (1) When the obligation secured by any deed of trust has been
satisfied, the beneficiary or the assignee of the beneficiary shall
execute and deliver to the trustee the original note, deed of trust,
request for a full reconveyance, and other documents as may be
necessary to reconvey, or cause to be reconveyed, the deed of trust.

   (A) The trustee shall execute the full reconveyance and shall
record or cause it to be recorded, except as provided in subdivision
(c), in the office of the county recorder in which the deed of trust
is recorded within 21 calendar days after receipt by the trustee of
the original note, deed of trust, request for a full reconveyance,
the fee that may be charged pursuant to subdivision (e), recorder's
fees, and other documents as may be necessary to reconvey, or cause
to be reconveyed, the deed of trust.
   (B) The trustee shall deliver a copy of the reconveyance to the
beneficiary, its successor in interest, or its servicing agent, if
known.
   (C) Following execution and recordation of the full reconveyance,
upon receipt of a written request by the trustor or the trustor's
heirs, successors, or assignees, the trustee shall then deliver the
original note and deed of trust to the person making that request.
   (2) If the trustee has failed to execute and record, or cause to
be recorded, the full reconveyance within 60 calendar days of
satisfaction of the obligation, the beneficiary, upon receipt of a
written request by the trustor or trustor's heirs, successor in
interest, agent, or assignee, shall execute and acknowledge a
document pursuant to Section 2934a substituting itself or another as
trustee and issue a full reconveyance.
   (3) If a full reconveyance has not been executed and recorded
pursuant to either paragraph (1) or paragraph (2) within 75 calendar
days of satisfaction of the obligation, then a title insurance
company may prepare and record a release of the obligation.  However,
at least 10 days prior to the issuance and recording of a full
release pursuant to this paragraph, the title insurance company shall
mail by first-class mail with postage prepaid, the intention to
release the obligation to the trustee, trustor, and beneficiary of
record, or their successor in interest of record, at the last known
address.
   (A) The release shall set forth:
   (i) The name of the beneficiary.
   (ii) The name of the trustor.
   (iii) The recording reference to the deed of trust.
   (iv) A recital that the obligation secured by the deed of trust
has been paid in full.
   (v) The date and amount of payment.
   (B) The release issued pursuant to this subdivision shall be
entitled to recordation and, when recorded, shall be deemed to be the
equivalent of a reconveyance of a deed of trust.
   (4) Where an obligation secured by a deed of trust was paid in
full prior to July 1, 1989, and no reconveyance has been issued and
recorded by October 1, 1989, then a release of obligation as provided
for in paragraph (3) may be issued.
   (5) Paragraphs (2) and (3) do not excuse the beneficiary or the
trustee from compliance with paragraph (1).  Paragraph (3) does not
excuse the beneficiary from compliance with paragraph (2).
   (6) In addition to any other remedy provided by law, a title
insurance company preparing or recording the release of the
obligation shall be liable to any party for damages, including
attorneys' fees, which any person may sustain by reason of the
issuance and recording of the release, pursuant to paragraphs (3) and
(4).
   (c) The mortgagee or trustee shall not record or cause the
certificate of discharge or full reconveyance to be recorded when any
of the following circumstances exists:
   (1) The mortgagee or trustee has received written instructions to
the contrary from the mortgagor or trustor, or the owner of the land,
as the case may be, or from the owner of the obligation secured by
the deed of trust or his or her agent, or escrow.
   (2) The certificate of discharge or full reconveyance is to be
delivered to the mortgagor or trustor, or the owner of the land, as
the case may be, through an escrow to which the mortgagor, trustor,
or owner is a party.
   (3) When the personal delivery is not for the purpose of causing
recordation and when the certificate of discharge or full
reconveyance is to be personally delivered with receipt acknowledged
by the mortgagor or trustor or owner of the land, as the case may be,
or their agent if authorized by mortgagor or trustor or owner of the
land.
   (d) For the purposes of this section, the phrases "cause to be
recorded" and "cause it to be recorded" include, but are not limited
to, sending by certified mail with the United States Postal Service
or by an independent courier service using its tracking service that
provides documentation of receipt and delivery, including the
signature of the recipient, the full reconveyance or certificate of
discharge in a recordable form, together with payment for all
required fees, in an envelope addressed to the county recorder's
office of the county in which the deed of trust or mortgage is
recorded.  Within two business days from the day of receipt, if
received in recordable form together with all required fees, the
county recorder shall stamp and record the full reconveyance or
certificate of discharge.  Compliance with this subdivision shall
entitle the trustee to the benefit of the presumption found in
Section 641 of the Evidence Code.
   (e) The violation of this section shall make the violator liable
to the person affected by the violation for all damages which that
person may sustain by reason of the violation, and shall require that
the violator forfeit to that person the sum of three hundred dollars
($300).  However, a trustee acting in accordance with subdivision
(c) shall not be deemed a violator for purposes of this subdivision.

   (f) (1) The trustee, beneficiary, or mortgagee may charge a
reasonable fee to the trustor or mortgagor, or the owner of the land,
as the case may be, for all services involved in the preparation,
execution, and recordation of the full reconveyance, including, but
not limited to, document preparation and forwarding services rendered
to effect the full reconveyance, and, in addition, may collect
official fees.  This fee may be made payable no earlier than the
opening of a bona fide escrow or no more than 60 days prior to the
full satisfaction of the obligation secured by the deed of trust or
mortgage.
   (2) If the fee charged pursuant to this subdivision does not
exceed sixty-five dollars ($65), the fee is conclusively presumed to
be reasonable.
   (g) For purposes of this section, "original" may include an
optically imaged reproduction when the following requirements are
met:
   (1) The trustee receiving the request for reconveyance and
executing the reconveyance as provided in subdivision (b) is an
affiliate or subsidiary of the beneficiary or an affiliate or
subsidiary of the assignee of the beneficiary, respectively.
   (2) The optical image storage media used to store the document
shall be nonerasable write once, read many (WORM) optical image media
that does not allow changes to the stored document.
   (3) The optical image reproduction shall be made consistent with
the minimum standards of quality approved by either the National
Institute of Standards and Technology or the Association for
Information and Image Management.
   (4) Written authentication identifying the optical image
reproduction as an unaltered copy of the note, deed of trust, or
mortgage shall be stamped or printed on the optical image
reproduction.
   (h) The amendments to this section enacted at the 1999-2000
Regular Session shall apply only to a mortgage or an obligation
secured by a deed of trust that is satisfied on or after January 1,
2001.
  SEC. 2.  Notwithstanding Section 17610 of the Government Code, if
the Commission on State Mandates determines that this act contains
costs mandated by the state, reimbursement to local agencies and
school districts for those costs shall be made pursuant to Part 7
(commencing with Section 17500) of Division 4 of Title 2 of the
Government Code.  If the statewide cost of the claim for
reimbursement does not exceed one million dollars ($1,000,000),
reimbursement shall be made from the State Mandates Claims Fund.
